China Car Forums banner

DCX CEO : We don't want to sign with Chery : Chery is just a bargaining chip

7478 Views 12 Replies 7 Participants Last post by  dragin

DaimlerChrysler talks to 2 firms on small car: paper
Monday, October 23, 2006; 3:51 AM

FRANKFURT (Reuters) - DaimlerChrysler (DCXGn.DE) has cut to two its list of potential partners for building a small car, Chief Executive Dieter Zetsche told a newspaper, but is wary about giving any Chinese firm a leg up in the U.S. market.

"We spoke with a handful of possible partners and there are two left now," he said in an interview published on Monday in Germany's Frankfurter Allgemeine Zeitung, adding that he still hoped to have a contract on the subcompact signed by year's end.

Industry sources have said China's Chery is one of the companies in talks, and Zetsche said cost/benefit analysis spoke in favor of Chery because DaimlerChrysler could not make small cars at costs that would make the business "comfortable."

On the other hand, he said, some partners did not offer the quality needed to make the small car in conjunction with U.S. arm Chrysler for sale in North America and elsewhere.

Asked whether he was worried that he could be giving a Chinese carmaker a platform to enter the U.S. market, he said:

"One reason why we have not concluded a deal with the potential partners is also the question of how we avoid that. We have very clear ideas there.

"Regardless of this, there is no doubt that not only Chery but also other Chinese rivals will sell their products in America and the rest of the world, with us or without us."

Chinese carmakers have used joint ventures with foreign manufacturers to build up a booming domestic industry but are increasingly looking to use this knowhow to develop their own products that can compete in China and on export markets.

One source familiar with the matter told Reuters that talks between Chrysler and Chery could drag on for some time given disagreements mainly over pricing and profit sharing.

-- Additional reporting by Fang Yan in Shanghai
So Chery was nothing but a baragaining chip to use against this non-Chinese manufacturer in negotiation.
1 - 5 of 13 Posts
Whatever happened to DCX's purpose for Mitsubishi? Have they given up and start all over again with the Chinese?
There used to be three; Mitsubishi, Hyundai, and Chery. According to DCX CEO's comment either Mitsubishi or Hyundai dropped out, and the remaining one is the top candidate whom DCX is trying to seal a deal with. Chery card is merely a bargaining chip used by DCX to pressure this either Mitsubishi or Hyundai to give them a better deal.
No where in the article says DCX is not going to sign with Chery
"One reason why we have not concluded a deal with the potential partners is also the question of how we avoid that. We have very clear ideas there.
In other word, Zetsche doesn't want Chinese in the US market.

Hyundai small-car hub’s here

Sindhu Bhattacharya
Tuesday, October 24, 2006 22:01 IST

Email Article Print Article
Most Emailed Articles RSS Feed
Most Viewed Articles Search This Site

NEW DELHI: India is on the fast track to becoming a global hub for small cars.

Hyundai Motor Corp is thinking of shifting production of all its low-cost models to markets like India and China, so that it can concentrate on making high-margin models in the home market.

This follows Suzuki Motor Corp eyeing annual exports of 4 lakh units from the country by 2010.

To begin with, the Korean auto major may shift all production of its premium compact car Click — known as Getz in some markets — to India and stop making this model in the home market altogether. Already, India has become the only production base across the globe for Hyundai’s bread-and-butter model Santro. With the latest move, India could become the global hub for both, Santro and Getz.

Says Arvind Saxena of Hyundai Motor India: “India offers very good cost efficiencies. Hyundai is thinking in terms of moving all production of Getz to India but no final decision has been taken on the matter.”

Getz was launched in India two years back. At the time of its launch in 2004, the Indian consumer appeared rather hesitant to buy a hatchback pegged at the premium end of the market.

And last year, when market leader Maruti jumped in the fray with its Swift in the same price bracket, Getz sales suffered further.

According to Hyundai India figures, Getz sells only about 1,400-1,500 units a month in the domestic market against over 5,000 units a month by Maruti’s Swift. No Getz is being exported from India, but from South Korea, 15,000 Getz are exported every month to markets including Europe and South Africa. Last year, Hyundai produced 2,00,903 units of Getz in South Korea.

Saxena attributes the unsatisfactory sales of Getz in India to capacity constraints. “For Hyundai India, production of Santro is top priority since this model has a continuous backlog. We are producing and selling up to 13,000 Santros every month but still there is a three-month backlog of about 25,000 units. In this scenario, we are unable to produce more Getz.”

At present, there is no backlog for Getz. But with Hyundai India gearing up for capacity expansion - its second plant should go on stream late next year, taking total production capacity to 6 lakh units per annum- production constraints for Getz should lessen. But will exports be as robust from India two years from now? Only time will tell. Saxena declined to divulge the capex planned for Getz once the new facility is operational.
Hyundai's moving all of its B-segment car production to India; a coincidence?
I know the article doesn't say anything else about china, but since we are ok with taking a little scrap of something and blowing it out of all proportion...............
Hyundai has no intention of exporting anything out of China, until they are allowed a 100% ownership of their Chinese plants.

The same goes for most other foreign brands in China. No 100% ownership, no export from China. Why do you expect foreigners to make any significant investment in China when the tech-stealing Chinese "partners" are present at the site?
1 - 5 of 13 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.